1 Using the income method of computing the National Income of a country, which of the

following are excluded?

a. Transfer payments
b. Value added
c. Final values of goods
d. Interest and dividends earned

2 Which of the following is not an objective of the Organisation of Petroleum Exporting Countries
(OPEC)?

a. Co-ordination and harmonization of oil policies of member countries

b. Provision of financial assistance to poor non-oil producing countries
c. Provision of relatively cheaper supply of oil to developed countries
d. Stabilisation of oil prices

3 What are the tools of macroeconomics?

a. Income Policy
b. Monetary Policy
c. Fiscal Policy
d. All of the above.

4 Gross Domestic Product

a. is the money value of the stock of all goods present in a country at a given period of
time.
b. is the money value of all final goods and services produced in a country during a year's
period of time.
c. is the money value of all transactions that occur in a country during a year's period of
time.
d. is the money value of all exports from a country during a year's period of time.

5 Which of the following can be used to check inflation caused by excess demand?
 a. Increase in discount rates
b. Increase in government expenditure
c. Reduction in income taxes
d. Reduction in cash reserve ratio

6 One main criticism of the World Trade Organisation (WTO) is that it is

a. Promoting optimal use of the world resources.

b. Working towards substantial reduction of all forms of barriers to international trade.
c. Only the developed member countries have succeeded in getting market access in the
developing countries.
d. Discouraging discriminatory treatment in international trade relation.

7 Who is considered as father of modern macroeconomics?

a. Adam Smith
b. Alfred Marshall
c. Prof. J. M. Keynes
d. Prof. J. N. Keynes

8 Autonomous consumption is consumption that:

a. is constant at first and then varies with disposable income.

b. is independent of the level of disposable income.
c. varies directly with disposable income.
d. varies inversely with disposable income.

9 That part of disposal income not spent on consumption is defined as:

a. autonomous consumption.
b. transitory disposable income.
c. saving.
d. disposal income.
10 Which of the following is an example of Monetary Policy?

a. The Central Bank of Nigeria buys bonds in the open market.

b. The Nigeria Treasury Department issues bonds to finance debt.
c. The federal government cuts taxes
d. Defense spending is cut to balance the budget.

11 Which of the following is/are the goals of macroeconomics

a. To Achieve Higher Level of Employment

b. Stability of Prices
c. To Achieve Higher Level of GDP
d. All of the above.

12 A major reason for the establishment of the Economic Community of West African States
(ECOWAS) was to

a. Help member countries overcome their balance of payment difficulties by providing

financial assistance.
b. Promote international monetary cooperation
c. Monitor and control the outflow of foreign exchange in the region
d. Promote the economic progress of member countries

13 Using the income method of computing the National Income of a country, which of the
following are excluded?

a. Transfer payments
b. Value added
c. Final values of goods
d. Interest and dividends earned

14 Money whose face value is greater than the actual value of the materials of which it is made is
referred to as

a. Fiat money
 b. Token money
c. Legal tender
d. Quasi – money

15 The following are problems associated with National Income computation except:

a. Changes in price level

b. Adequate statistical data
c. Depreciation
d. Double counting

16 According to Keynes, what is the most important determinant of households' spending on goods
and services?

a. The interest rate.

b. The price level.
c. Autonomous consumption.
d. Disposable income.

17 Economics is best defined as the study of how

a. public goods and services are produced

b. businesses make investments to maximize profits
c. markets allocate resources efficiently
d. society chooses to allocate its scarce resources

18 Which of the following is not a function of commercial banks?

a. Granting loans and advances

b. Accepting deposits of money
c. Providing foreign exchange services
d. Issuing and distributing currency notes and coins

19 The classical economists argued that the production of goods and services (supply) generates an
equal amount of total income and, in turn, total spending. This theory is called:
 a. Keynes' General Theory.
b. The law of autonomous consumption.
c. The "animal spirits" theory.
d. Say's Law.

20 Which of the following statements is not true of the functions of money

a. A unit in terms of which the value of a good is determined

b. Facilitating the exchange of goods and services
c. Ability to last for a long time without losing its value
d. A standard of deferred payment

21 The study of groups and broad aggregates of the economy is known as

a. International Economics
b. None of the above.
c. Macroeconomics
d. Microeconomics

22 A progressive tax

a. taxes those with more income at higher rates

b. is one that encourages the greater work effort
c. progresses in efficiency as incomes rise
d. is one that incorporates the newest and most innovative principles of taxation

23 Under the flexible exchange rate regime, an increase in the value of a country's currency in
relation to foreign currencies is called

a. Revaluation
b. Appreciation
c. Depreciation
d. Devaluation
24 Macroeconomics became popular after

a. 1972-73
b. 2006- 07
c. Great depression of 1929- 33
d. 1996- 97

25 The book "General Theory of Employment, Interest and Money" was published in

a. 1963
b. 1936
c. 1987
d. 1836

26 The term microeconomics and macroeconomics were first given by

a. Ragner Frisc
b. Adam Smith
c. Alfred Marshall
d. Prof. J. M. Keynes

27 Those inflows of money to the government account against which no liability of repayment is
created, is called-

a. Capital expenditure.
b. Revenue receipts;
c. Revenue expenditure;
d. Capital receipts;

28 When aggregate demand exceeds aggregate supply, the result is

a. imported inflation
b. spiral inflation
 c. demand-pull inflation
d. cost push inflation

29 The change in investment due to change in income is known as-

a. IS curve
b. Accelerator;
c. Consumption;
d. Multiplier;

30 What are the tools of macroeconomics?

a. Monetary Policy
b. Fiscal Policy
c. All of the above.
d. Income Policy

31 In macroeconomics, we study about

a. Theory of National Income & Employment

b. Theory of Money Supply & Price Level
c. Theory of International Trade & Eco growth
d. All of the above.

32 In trade/ business cycle, the cycles follow this sequence-

a. Prosperity or boom → depression or slump → recession and then → Recovery.

b. Recession → depression or slump → Recovery and then → Prosperity or boom
c. Recovery → recession → depression or slump and then → Prosperity or boom.
d. Prosperity or boom → recession → depression or slump and then → Recovery;

33 An annual statement of the revenue and expenditure by the government is known as-
 a. Revenue budget;
b. Consumer Budget
c. Budget;
d. Capital budget;

34 Which of the following controls money supply in the economy to promote economic growth and
development?

a. Central Bank
b. Finance companies
c. Development banks
d. Commercial banks

35 The change in consumption divided by a change in disposable income is defined as:

a. autonomous consumption.
b. Keynes' absolute disposable income hypothesis.
c. the marginal propensity to consume.
d. the consumption function.

36 The difference between indirect tax and subsidy is known as

a. Net Factor Income from Abroad

b. Net Indirect Tax.
c. Depreciation
d. Capital Consumption Allowances

37 The study of groups and broad aggregates of the economy is known as

a. None of the above.

b. International Economics
c. Microeconomics
d. Macroeconomics
38 Which of the following is NOT included in GDP?

a. the value of childcare services rendered to their own children by housewives.

b. income and output for the year
c. consumer spending on durables.
d. different types of investment.

39 In a three-sector closed economy, which of the following is a form of leakages?

a. Government expenditure
b. Investment expenditure
c. Personal savings
d. Export

40 Which of the following best describes the concept of economic growth?

a. Increase in real per capita income

b. Increase in the exchange rate of country's currency
c. Increase in the welfare of the citizens
d. Reduction in prices of goods and services

41 The following are instruments of monetary policy except:

a. Cash reserve ratio

b. Taxation
c. Moral suasion
d. Discount rate

42 Investment means the purchase of

a. Old machines, old buildings and other capital goods

b. None of the above.
c. New machines, new buildings and other capital goods that add to the existing stocks
of capital.
 d. Both

43 The term ‘macro' has been derived from

a. French word ‘makros' which means large

b. Greek word ‘makros' which means small
c. Greek word ‘makros' which means large
d. English word ‘makros' which means large

44 Joseph lost his computer programming job when it was outsourced to a company abroad. After
looking unsuccessfully for several months for another job, he gave up and returned to school to
receive training to become a physical therapist. Currently Joseph is classified as

a. not in the labor force

b. cyclically unemployed
c. structurally unemployed
d. frictionally unemployed

45 Which of the following is/are the goals of macroeconomics?

a. To Achieve Higher Level of Employment

b. To Achieve Higher Level of GDP
c. Stability of Prices
d. All of the above.

46 Which of the following is an example of Monetary Policy?

a. The Nigeria Treasury Department issues bonds to finance debt.

b. Defense spending is cut to balance the budget.
c. The Central Bank of Nigeria buys bonds in the open market.
d. The federal government cuts taxes

47 The following are arguments for trade protections except:

 a. Protect the newly established industries
b. Raise revenue for the government
c. To increase the import values
d. Prevent dumping

48 Which is/are the determinant/s of private investment-

a. Prospective income from the capital asset;

b. Supply price of the capital asset;
c. All of the above.
d. The rate of interest

49 Which of the following measures the value of goods and services produced within a given
country for a given year?

a. GNP
b. Per Capita Income
c. GDP
d. NNP

50 A linear relationship between consumption expenditure and disposable income is

a. Autonomous consumption function

b. Consumption function
c. Marginal propensity to consume
d. Average propensity to consume

51 The money value of all final goods and services produced in the domestic territory of a country
during a year plus Net factor income from abroad is called

a. GNP
b. GDP
c. GDP
d. GNP
52 Economics is best defined as the study of how

a. society chooses to allocate its scarce resources

b. public goods and services are produced
c. markets allocate resources efficiently
d. businesses make investments to maximize profits

53. National income can be defined as

a. the market value of goods and services produced in a state
b. the monetary value of all the goods and services produced in a country during
an accounting period, usually a year
c. the company value of all goods and services
d. the value of goods and services produced globally

53 Circular flow of income as a model

a. shows the movement of resources among states
b. shows the movement of fund
c. indicates the flow of human capital
d. shows the movement of resources between firms and households

54 Gross domestic product (GDP) refers to

a. total monetary value of all final goods and services produced within an
economy over a given period of time
b. monetary value of all final goods and services produced by the nationals of a
country whether currently living in the country or abroad
c. earnings of an individual for taking part in the production process
d. income which is left after personal income tax has been deducted

55 Depreciation also refers to

a. capital formation

b. capital destruction

c. net national product

 d. capital consumption

56 By ‘stock’ variable, we mean

a. total amount of existing output at a particular point in time

b. the amount of current output

c. value of output produced in a given year

d. excess capacity

57 National income computation by income approach

a. sum the value of households expenditure

b. sum all income received by factors of production

c. sum the value added to input

d. takes account of government intervention

58 One of the determinants of national income is

a. the number of political parties

b. the method of data gathering

c. business law

d. the state of technology

59 We measure national income so as to

a. criticise government programme and policies

b. make future economic forecast

c. develop an economic model

d. identify individual problems

60 One of the major problems encountered during national income accounting is

a. adjustment problem
 b. valuation problem

c. counting problem

d. communication problem

61 By excluding illegal or underground activities from national income accounting

a. the exact economic contribution is overestimated

b. the true economic contribution is taken

c. the correct economic contribution of each sector is underestimated

d. we can rely totally on the figures

62 Aggregate expenditure in an open economy is represented by one of the following (C=

consumption, I =investment, G=government expenditure, NX=net export, M=import and N=
export)
a.C+I+G
b.C+I+G+XN
c. C+I+G+NX
d.C+I+G-M
63 One of the following is a net export, where X =export and M = import
a. X+M
b. G-M
c. X/(X+M)
d. X – M
64 Keynesian model of income determination was given impetus by
a. The need to propound a theory
b. The inability of the classicalists’ proposition to solve the depression of 1930s
c. The need to counter the existing theory
d. All of the above
65 One of these theories postulates that during a recession, interest rate should fall and this would
stimulate consumption and investment spending
a. Classical theory
b. Neo classical theory
 c. Keynes theory
d. Keynessian theory
66 Keynes concluded that a laissez-faire economy could fall into which of the following?
a. Unemployment
b. Inflation
c. Recessional trap
d. None of the above
67 The classicals believe that a market-driven economy would better achieve which of the following
goals?
a. Full employment
b. Price stability
c. Economic growth
d. All of the above

68 Which of the following led to the criticism of the classical economics?

a. Keynessian economists
b. The great depression of 1930s
c. The monetarist
d. The Neoclassicals

69 Which of the following describes the common usage of the term recession?
a. A fall in real GDP for two consecutive quarters
b. The slump in the supply of machinery
c. The low demand for goods and services for a quarter
d. The lack of industrial goods
70 Which of the following is the earliest economist to recommend the laissez-faire economy?
a. David Ricardo
b. John Maynard Keynes
c. Adam Smith
d. A.C Pigou
71 The branch of economic theory, and the doctrines, associated with Keynes is called
a. Keynes economics
b. Cambridge economics
c. Keynessian economics
d. Classical economics
72. Which of the following pairs best fit with fiscal policy?
a. Taxes and government spending.
b. Open market operations and reserve requirement
c. Taxes and open market operation
d. Open market operations and government spending

73. What is the primary purpose of taxation?

a. To annoy the public
b. To save money
c. To support the government
d. To help the Fed

74. Which of the following does not involve government spending?

a. Tayo purchases a new car.
b. Segun receives unemployment benefits.
c. Foluso is in the navy.
d. Lekan works for a defense contractor.

75. Which of the following is the key to taxation?

a. Government does not affect the public's money.
b. the government takes money from the public
c. The government gives money to the public.
d. None of the above.

76. Which of the following is the key to government spending?

a. The government does not affect the public's money.
b. The government takes money from the public.
c. The government gives money to the public.
d. None of the above

77. What does expansionary fiscal policy do to the production of cassava in Nigeria?
a. Does not affect it
b. Increases it
c. Decreases it
d. It depends
78. What does contractionary fiscal policy do to output?
a. Does not affect it
b. Increases it
c. Decreases it
d. It depends

79. What is the effect of expansionary fiscal policy on the money supply?
a. It depends
b. Does not affect it
c. Decreases it
d. Increases it

80. What is the effect of fiscal policy on the money supply?

a. It depends
b. Does not affect it
c. Decreases it
d. Increases it

81. What is the effect of stable fiscal policies on the money supply?
a. It depends
b. Does not affect it
c. Decreases it
d. Increases it

82. Demand-pull inflation may be caused by:

a. An increase in costs
b. A reduction in interest rates
c. A reduction in government spending
d. An outward shift in aggregate supply

83. Inflation:
a. Always reduces the cost of living
b. Always reduces the standard of living
c. Reduces the price of products
d. Reduces the purchasing power of money

84. An increase in injections into the economy may lead to:

a. An outward shift of aggregate demand and demand-pull inflation
b. An outward shift of aggregate demand and cost-push inflation
c. An outward shift of aggregate supply and demand-pull inflation
d. An outward shift of aggregate supply and cost-push inflation

85. An increase in aggregate demand is more likely to lead to demand-pull inflation if:
a) Aggregate supply is perfectly elastic
 b) Aggregate supply is perfectly inelastic
c) Aggregate supply is unit elastic
d) Aggregate supply is relatively elastic

86. An increase in costs will:

a) Shift aggregate demand
b) Shift aggregate supply
c) Reduce the natural rate of unemployment
d) Increase the productivity of employees

87. The effects of inflation on the price competitiveness of a country's products may be offset by:
a) An appreciation of the currency
b) A revaluation of the currency
c) A depreciation of the currency
d) Lower inflation abroad

88. According to the Phillips curve, unemployment will return to the natural rate when:
a) Nominal wages are equal to expected wages
b) Real wages are back at long-run equilibrium level
c) Nominal wages are growing faster than inflation
d) Inflation is higher than the growth of nominal wages

89. In the short run unemployment may fall below the natural rate of unemployment if:
a) Nominal wages have risen less than inflation
b) Nominal wages have risen at the same rate as inflation
c) Nominal wages have risen more than inflation
d) Nominal wages have risen less than unemployment

90. The Phillips curve shows the relationship between inflation and what?
a) The balance of trade
b) The rate of growth in an economy
c) The rate of price increases
d) Unemployment

91. The quantity theory of money allows monetarists to obtain a number of economic predictions
by assuming a constant
a)velocity of money
b)nominal output
c)overall price level
d)stock of money

92. Every international transaction automatically enters the balance of payments

(a) Once either as a credit or as a debit.
(b) Twice, once as a credit and once as a debit.
(c) Once as a credit.
(d) Twice, both times as debit.
93. If Nigeria exports price index rose from 150 in 220 in 2010 and her import price index rose from 150
to 160 in the same periods. The Nigeria terms of trade (TOT nb) will be…
(a) 100, 137.5
(b) 180, 160
(c) 175, 135
(d) 185 , 145
94. Which one of these measures cannot utilize to correct balance of payment (BOPs) deficit in Nigeria?
(a) Import promotion
(b) Export promotion
(c) Import substitution
(d) Exchange control
95. Which one of the following expressions is the most accurate regarding current account (CA) of BOPs?
(a) CA=Export – Import
(b) CA = Import – Export.
(c) CA=Export=Import.
(d) CA = Export + Import.

96. When a country’s currency depreciates,

(a) Foreigners find that its exports are more expensive, and domestic residents find
that imports from abroad are more expensive.
(b) Foreigners find that its exports are more expensive, and domestic residents find
that imports from abroad are cheaper.
(c) Foreigners find that its exports are cheaper; however, domestic residents are not
affected.
(d) None of the above.

97. One of these is not the causes of balance of payments (BOPs) deficits in Nigeria.
(a) Poor performance of the non-oil sector
(b) Import substitution strategies
(c) High servicing of debt
(d) Export promotion

98. The record of a country's imports and exports of goods and services is called its:
(a) Balance of trade.
(b) Terms of payments.
(c) Balance of payments on current account.
(d) Visible trade balance.

99. A central bank’s international reserves include:

(a) Any gold that it owns.
(b) Any silver that it owns.
(c) any gold that it owns and foreign and domestic assets
.(d) any silver that it owns and foreign and domestic assets.

100. The record of a country's imports and exports of goods and services plus net investment incomes
and current transfers of money to and from abroad, is called its:
(a) Visible trade balance.
(b) Balance of payments on current account.
 (c) Balance of trade
(d) Balance of payments.

101. The situation whereby a country imports more than her exports is:
(a) A trade deficit.
(b) A recession.
(c) An expansion.
(d) A trade surplus.